Lars

de Haas

Juggling with patent costs

With the political negotiations on the EU patent the season is open for rhetoric on the topic of statistics of patent costs.

The game seems to be that current European patent costs should be represented as high as possible and costs outside Europe should be played down as much as possible.

As an extreme example, the Danish minister, Mr. Ole Sohn, stated that a European patent costs 36,000 Euro, a US patent 2,000 Euro and a Chinese patent 700 Euro. As anyone with a minimum of experience with patenting will know, these US and Chinese figures leave out costs that are included in the European estimate.

Hundreds of thousand Euros for maintenance fees?

But in all fairness, it must be admitted that Mr. Sohn has not even begun to count much of the possible costs in Europe. If a patentee really paid all costs of translation and maintenance fees for twenty years in all European countries the costs of a patent in Europe would easily rise to several hundred thousand Euros. In the US, maintenance fees for the same period are only US$8710, to be paid more simply in three installments.

Are these costs justified? One theory behind maintenance fees is that they reduce the number of patent rights that needlessly deter other parties even though the patentee has lost real interest.

From this point of view, maintenance fees in Europe are very successful indeed. The costs are so excessive that almost no patentee considers filing in all countries to begin with. Therefore, reform of maintenance fees is one important reason why the new EU patent could make truly Europe-wide patents feasible, if applicants don’t switch to national patents.

Further consequences of maintenance fees

As far as they are paid, the maintenance fees are also used to subsidize the general treasury, the European patent office and local patent offices in each and every European country. This is a price for the sovereignty and national differences of the individual EU member states. Seen from this perspective, the current European patent is a bargain, by which one can get more than twenty patents at a price of less than twenty times the costs in the US and China, at least if one uses a more realistic comparison of the costs than Mr. Sohn.

Unfortunately, the maintenance fees enable the local patent offices to (over-)regulate formalities each in their own way. This results in an administrative burden that invokes the costs of a web of patent agents to perform a host of acts that have no counterparts in the US or China, which is another important reason why patent costs are much higher in Europe.

Is this bad? Yes, if one looks only at the ideal of a unified market, or if politicians mistakenly see an increase in the number of patents as a cause of increased innovation rather than that they are willing to accept patent based profits as a consequence. And a EU patent will simplify resolution of conflicts between multinational competitors. But one could question the benefits for small business that is currently satisfied with patents in a limited number of European countries. They are left out in the rhetoric about costs and Europe-wide systems. For them, patents are likely to become more complex and expensive unless they return to national patents. Perhaps they would be helped more if the European patent office could act as agent for national patent offices to perform examination for multiple countries at once, so that it is easier to step out of the European system.